Posts Tagged ‘One 57’
Monday, November 18th, 2013
Posted by Leonard Steinberg on November 18th, 2013
Life in real estate land involves many liars and lies. It is especially bad when these lies are summarized and printed as truth by a major newspaper.
THE NEW YORK POST just reported how the millionaires will pay NO real estate taxes for 10 years in super-luxury buildings such as 157 West 57th Street because of the 421-a tax abatement …..read the excerpt below:
“Thanks to Albany, luxury developers may dodge property taxes in exchange for building — or at least funding — some affordable housing. But with $1 billion a year in uncollected taxes, are these really good deals for NYC? At 90 stories, it will be tallest residential tower in the city. With sweeping views of downtown Manhattan and Central Park, the $1.5 billion building is one of the most coveted addresses; a 14,000-square-foot penthouse already sold for more than $90 million. One57 has another perk as well — its residents stand to pay no property taxes for 10 years.”
This is completely false and inaccurate. The 421-a program phases real estate taxes in over a 10 year period incrementally escalating every 2 years over the 10 year period. At 157 West 57ht Street, ALL owners including the owner of the hotel component will be paying sharply reduced real estate taxes for 2 years. Then the taxes will jump….and then again 2 years later….and 2 years later …..until they reach the fully taxed amount which will more than likely be MUCH higher than in neighboring buildings where there are similar sized and similar quality apartments. All in all I would bet that this building will pay much higher real estate taxes in its first 2 years (of sharply reduced taxes) than it was paying when it was a vacant site or the building that existed on the site prior to it becoming 157 West 57th Street.
I am not a fan of Gary Barnet, and I am not here to defend him. But SOMEONE, SOMEWHERE has to speak up when the lies and mis-truths about this abatement are espoused and no-one seems to argue the facts. The reality is:
- the abatement program encourages developers to build
- encourages buyers to buy in knowing they are getting bit of a break ( it MAY just cover a bit of those transfer taxes they have to pay when closing)
- the taxes at the end of the abatement period are almost always SIGNIFICANTLY higher than comparable buildings
- the taxes paid at the beginning of the sharply reduced period usually bring in more revenues than what was on the site before anything was built, hence a net gain to the City and State.
- the taxes these transactions generate at closing are HUGE: think $ 1m+ for each $40 million apartment sold for transfer and mansion taxes….so 157 West 57th Street will generate well north of $50 million when the units close in its first year alone!
- now add in the taxes generated EVERY DAY by the hotel component….hotel taxes, sales taxes, etc.
- bottom line: this building will generate TENS OF MILLIONS of dollars in taxes every year and this will continue growing over the 10 year abatement period.
“Our city spends $1 billion every year on these kinds of subsidies, with little affordable housing to show for it. These valuable public resources should be used to keep New York affordable for middle- and low-income New Yorkers,” said Brooklyn Councilman Brad Lander. Mr. Lander: you are lying….please stop it!
In short, this article, and most others ever written about the 421-A program, are simply ignorant, pathetic attempts at reporting. They do not in any way address the big issue they deem most important: tax revenues. Yes, all these buildings generate MASSIVE revenues for the City and State. After the 10 year period they are being unfairly assessed too. Could we please install just a wee bit of fact-based intelligence into this abatement discussion?
Friday, June 14th, 2013
Posted by Leonard Steinberg on June 14th, 2013
My recent experience selling 150 Charles Street, the record-shattering new Witkoff-developed building in the West Village, and more recent sales in other new very high end buildings in Manhattan, has given me a great insight into the mindset of New York high end buyers when it comes to the subject of how they value BIG views. This weekend the Financial Times writes about buyers of rural properties focus on controlling the view: the same can be said for Manhattan buyers. For many there is the similar delusion you have when buying a seat in the opera in the second row…..chances are a big-haired lady will sit in the front row and block that view!
The reality is the front row ALWAYS costs more for obvious reasons: a protected, beautiful view in a city like New York can be a collector’s item. Especially now with the rapidly accelerated construction boom of 2013 that can easily result in the lot everybody said would never be developed being developed and blocking the view you fell in love with. Some ‘protected’ views can be tricky with the highly ambiguous zoning laws that exist in New York. Two separate zoning lawyers can often come to a completely different conclusion when analyzing the building potential of a specific neighboring site. The views from 10 Madison Park West over the park are quite simply divine…..and protected.
Buyers at One Madison Park were told that the developer bought all the surrounding air rights so their views were protected: apparently not. Another developer has been buying the air rights that were not purchased and is planning a much larger building than this as we speak. Personally I bought an apartment that had a ‘protected view’ and recently was shocked to learn that some sneaky zoning code will reduce that view to that of a courtyard. Oh well, I still have another pretty spectacular exposure on the other side of my apartment that is 100% protected.
Buyers at One 57, the uber-tower on 57th Street, that what was to be the tallest residential tower in New York has already been eclipsed by 432 Park Avenue and another building just a few doors away. So buying on a super-high floor is not necessarily a guarantee of a permanent big view. Buildings fronting Central Park know this only too well.
With all these lost views, there is a strong argument to be made that when you actually find one of those rare, truly protected big views, you are indeed the owner of a collector item. A big view expands the visual effect of the size of the spaces we live in. For those who don’t have this luxury, there are options to control your view. And not all views are big city-scapes or river exposures. I’ve always felt that a beautifully landscaped terrace, such as the one at 40 Bond Street, is a controlled view (that happens to remain green 12 months of the year) and has as much, if not more, value than a bland big view of Long Island City. There is, however, another audience who is seeking superb space…..and views don’t matter: these buyers own country homes and do not seek a rural experience in the city. They want the best neighborhoods, graciously laid out homes and the views are secondary at best. They would rather pay a bit less for a lesser view. Many with serious art collections actually do not like big views as they are often associated with too much light.
The views at Walker Tower are rather exceptional in that they are of a human scale……they start becoming phenomenal on about the 12th floor. That’s is very unusual: most times views of that grandiosity start on the 50th floor, which is an entirely different experience. Many park-facing buyers are mistaken when they focus exclusively on the highest possible floor when some of the mid-level floors offer the most beautiful park experience, transporting the exposure to the park well into the apartment. Often the lower floors of townhouses have the best views towards the gardens and street trees.
I learned that if there was anything that sold during the worst months of the 2008/9 recession, it was the apartment with the big, protected view: I doubt that will change. So two camps are emerging, although the big views pricing is usually higher. What I have witnessed in the past few months confirms that this trend will only intensify for the very best, most pricey apartments. As the expectation for price per square foot intensifies will the scale of these big views apartments deter buyers and lead them to focus more on space? We shall see…
Wednesday, February 27th, 2013
THE BACCARAT HOTEL AND CONDO located at 20 West 53rd Street make its debut in what I think is a rather over-subscribed midtown mix: Starwood Capital’s hotel and condo tower has already settled on a price for its penthouse unit, supposedly asking $60 million ($8,128/sf). For $60 million, the buyer gets a duplex with 7,381 square feet interior, plus a 417-square foot balcony. The unit has five bedrooms and 5.5 baths (the master with a floating sculptural tub….cut crystal we hope!).
The sleek, black SOM-designed tower will be 46 stories and contain just 61 condominiums. The latest offering plan, filed on Thursday with the Attorney General’s office, puts the building’s total price at a hair above $523 million. The cheapest unit listed is a 932-square foot one-bedroom unit on the 23rd floor, asking just $2.26 million….although I suspect with the insanely busy first quarter these prices will be amended upwards. Residences will begin at the 18th floor, according to the building’s website, and will have ceilings of up to 14 feet. Will they offer the kind of views these buyers expect in this location?
With One 57 only 60% sold out in a market that had no competition, after almost 2 years on the market and more pre-completion press and buzz than any other building ever, and other buildings such as the MOMA Tower, 432 Park Avenue and a string of others on the way, I cannot help but think that this market in midtown may be just a wee bit over-subscribed. Yes, there is a large demand from foreign and out-of-town buyers for this location with its undeniable conveniences to the central business district, shopping heaven, culture and Central Park, but when you look at the volume of units at a price point that for most wealthy buyers is somewhat unreachable, I just wonder how many mega-millionaires are out there ready to buy these extreme-priced units, many of which are looking awfully similar. If Baccarat offers a strong list of $ 2,5 – 5 million units they will do well, but I wonder whether the bug that too many developers caught a few years ago whereby extreme luxury at extreme pricing became the focus may deliver a really bad hangover.
Saturday, January 12th, 2013
Posted by Leonard Steinberg on January 12th, 2013
In the coming weeks and months, over 7,000 units of new construction LUXURY apartments will be coming to the market in New York……that is a VAST number of units and will significantly alter the bland inventory landscape we are currently experiencing. While one could argue that the record prices achieved by those few developers who actually had a building to sell were as a result of great product, the reality is those prices were also probably fueled by the lack of competition. How would pricing at One 57 have fared if 432 Park Avenue, the MOMA Tower, One Madison Park, the new Extell Tower and Michael Stern’s Tower on 57th Street were all on the market simultaneously?
Until recently most developers and their bankers speculated that every buyer is looking for a really large apartment with super-duper-luxury finishes and amenities. This theory will now be put to the test as we enter the chapter where the consumer will give us the ultimate reality check.
We are working on several new buildings Downtown in the West Village (150 Charles Street), Tribeca, West Chelsea, Soho and Noho: All will be thoroughly unique and special and distinctive: There is really no room in the ultra-luxury market for anything less.
Again, averages will be the curse of the market: Just because a certain AVERAGE price was achieved for the past 12 months, is that price applicable to all product? I think not. I firmly believe that the buildings in the best locations with the best balance of quality, design, structure and price such as 150 Charles Street in the West Village will win and I am afraid there will be some sore losers where a disturbing reality check will come to those developers whose pricing expectations simply are not based on reality. Excessive, overly ambitious pricing will be met with resistance I believe because no-one knows exactly the depth of demand. Yes, there certainly are a strong group of buyers who are waiting to buy these large, very expensive apartments…….but are there enough of them to absorb all this inventory that seems to be focused on the exact same profile buyer? Only time will tell. I believe the very best will win and be perfectly successful, but I think there are several rather average products coming out whose expectations of well-above-average pricing will be met with disappointment.
Moving forward, developers will have to be much more innovative: This week, I met with a mega-developer planning a rather exciting new building. It was refreshing to hear him talk about the need for innovation and beauty before dollars per square foot…..all are important, but the blind focus on pricing alone may prove to be a wake-up call to many developers and their bankers in the coming months.
Monday, October 29th, 2012
Posted by Leonard Steinberg on October 29th, 2012
The uber-hyped, mega-luxe Extell new condominium building located at 157 West 57th Street is one of the first victims of Hurricane Sandy: The crane at the top of this construction site
has collapsed and the area is being cleared. If you think the winds on the street are strong, can you imagine what kind of wind gusts are happening almost 1000 feet in the air? YIKES!
Saturday, September 22nd, 2012
Posted by Leonard Steinberg on September 22nd, 2012
Is BRICFLATION upon us? In this morning’s Financial Times a story addresses a potential pricing bubble in the Central London new construction real estate market, where it was identified that just under 20% of the buyers are UK citizens and the majority buyer pool are foreign, mostly from the far east. With growth slowing in these countries, is there a pricing bubble at play?
New York has been aflutter with talk of ‘all the foreign buyers’, and indeed they have become a sizeable force: Are they artificially boosting pricing here too? What is the percentage of foreign buyers? 5%? 10%, 25%? Data is showing that the vast majority of buyers are indeed domestic, although at many of the brand new buildings (and there are not that many……yet) a good chunk of the buyers have indeed come from BRIC countries. Is this demand pushing pricing up beyond reality? New York pricing is still comparatively cheap next to London. In Miami a huge pool of foreign buyers has helped a recovery, especially in prime new buildings.
Only time will tell in Manhattan how much of the coming construction boom will be bought up by local or foreign buyers: And will BRICFLATION be a concern in the coming months and years. One 57 certainly has a large chunk of foreign buyers, but that is a mere sliver of the market…..when those units close in 2013, watch out for those prices boosting averages artificially for sure.
Saturday, May 19th, 2012
Posted by Leonard Steinberg on May 20th, 2012
As news broke this week that the Thomas Juul Hansen designed penthouse at One 57 (157 West 5th Street) sold for around $ 90 million, a new record for New York City real estate pricing, I am in California observing other markets. And all I can hear is how the real estate markets around the country, especially on the high end, have come roaring back to life in prime locations. In Boston, Montecito, Miami, Bel Air, London, Monaco, new pricing records are being achieved. A friend of mine recently completed a renovation of a house in Boston: within days they had multiple bids, over the asking price.
I did find it amusing how Gary Barnett announced blatantly in the New York Times this morning that the buyer of the penthouse at One 57 was NOT Russian, as if having Russian buyers in a building would somehow de-value the building? Is it possible that the Russian selling his MAJOR apartment at Time Warner is indeed this buyer? Or is it democratically-elected-president-for-life Vladimir Putin who was simply too busy buying real estate to attend the G8 conference? Is it Borat, or just the dictator he plays in his latest movie?
I have heard similar sentiments from brokers and owners from St. Jean Cap Ferrat to Santa Barbara. Some buyers actually ask the question: Are there many Russians in the building/neighborhood? I thought that was illegal….. Russian buyers have certainly been a potent force in the Manhattan market in the past few years: In New York, might sentiments of this nature spark the re-surgence of the tough, secretive co-op board that could prevent the sale of an apartment to a Russian without providing any reasoning for a turn-down?
Wednesday, April 4th, 2012
Posted by Leonard Steinberg on April 4th, 2012
I have checked into the DREAM HOTEL Downtown while my apartment is being renovated: It certainly has brought up several thoughts about hotel rooms and hotel life…..living in a hotel in your own City is very different than being in a hotel on vacation.
I have always wondered what it would be like living in a building like the Time Warner Center or One 57, condominiums with hotel services from the hotels that are part of the building. The obvious perks such as room cleaning and room service are something I could get used to. But I have to say, regardless of how I would decorate my room/apartment, living in a hotel would not work for me. Its just a bit too impersonal for me, although now I understand better how some may find this lifestyle quite appealing.
I chose this hotel over several other more obvious choices because its location close to my office and apartment made the most sense…..The Dream Hotel is much more groovy and hip than I will ever be: the space-age nautical themed rooms with their large circular porthole style windows frame exceptional views of Midtown. While the suite is large with a pleasant seating area/living room and writing desk, there are certain elements of its design that should be re-thought, regardless of how hip the clientele is:
1) Bed headboards are named that for a reason: they should support a head. These don’t. The lighting above the bed is awful: its inadequate: Do hipsters not read?
2) The one dismal light above the bed has a light switch just far enough away so that you have to get out of bed to turn it on or off….
3) The closet space is sufficient for a 2 night stay….for one person. I have a rolling rack in the room to accommodate my 2-3 weeks worth of clothing.
4) All the written materials are really, really small: granted I have poor eyesight, but with all the super-dim lighting everywhere, I imagine this is hard for most to read. Why do hotels insist on small fonts on the shampoos and conditioners in the bathroom…..should I wear reading glasses in the shower?
5) As always, the tech requires a training program to operate: when will a hotelier understand that guests would like simple, easy-to-use televisions, light switches, phones, etc? Have they not seen a single Apple product to understand this concept?
6) Many may frown at the shiny steel sinks and tubs: I frankly love the fact that there is no way any dirt could exist without being clearly visible. Washing your face with the high-design sink may prove too challenging for most.
7) I ordered a lobster salad the other night via the very efficient room service……a lobster salad requires more than one piece of lobster in my opinion: maybe if I was more hip I would accept the one little chunk as its less to purge prior to hitting the town in a super-fitted ensemble?
8) The staff are super-friendly and efficient, exactly the opposite of what you’d expect from a hip, designer boutique hotel. While a hotel of this style would be perfectly at home in Miami, high quality New York staffing would make it a total winner when compared to most Miami hotels with their rude inefficient staff.
Sunday, February 12th, 2012
Posted by Leonard Steinberg on February 12th, 2012
I just read an article in the New York Times that confirms domestic First Class on airlines is just a slightly bigger, wider version of the horrific Coach class airlines offer to fliers, regardless that they are spending triple or more for their seat. In fact, the perks for flying first class have shrunken more and more as each year goes by. I see the same trend happening in the new buildings coming to Manhattan.
It used to be that delivering a doorman with a nice lobby, a workout room/gym and a kitchen with a Sub Zero fridge, Viking oven and granite counters qualified as first class luxury real estate in New York: That has changed rather dramatically, and will change even further going forward. I am fortunate in that I see many of the plans for new buildings well before they come to market. And with many developers focusing their attention on the MEGALUXE market (a term we coined in Luxuryletter), the flying equivalent of the private jet commuter, a doorman and fancy kitchen are the expected basics. Now with a more educated and demanding buyer who has been seduced and spoiled internationally not only by very super-luxe residential buildings, but also some exceptional hotels, the bar has been raised even further.
The MEGALUXE building has to deliver on many levels. It has to develop a very prolific personality, with something exceptional about its entirety. Strong ceiling heights, views, solid windows, superior finishes throughout are expected. Beyond that, systems have to be discretely installed. In fact, everything has to be installed with a level of quality that New York is not accustomed to. If I hear a London-based or Beijing-based buyer say it one more time, I could lose my mind: quite frankly, they are appalled by the quality of craftsmanship in the majority of new buildings….APPALLED! Yes, this is not your first class cabin flyer……they are used to the customized cabin of a Gulfstream. Often their interior designers have designed the interiors of their jets as well as their homes, and they demand a consistency. Developers in Manhattan have not yet catered to this buyer properly: Candy & Candy of One Hyde Park have certainly done so, even though I find their taste level very Nouveau-BRIC-chic….if you know what I mean. One Fifty Seven, the new condominium/Park Hyatt hotel tower on 57th Street epitomizes New York’s version of this market.
A nice gym is not good enough: a gym has to cater to the hyper-demands of a client who has a personal trainer commissioned to deliver their subject with an Olympic athlete’s body. The gym has to adjust to the changing styles of workouts. Personally I cannot think of a high end client who wants to share their gym with hotel guests, although in some of these new buildings they will be forced to do so. Hotels have been exceptionally demanding on condominiums in the conveniences they deliver…..and the MEGA CLASS has become spoiled. Finding a balance between home and hotel will be tough, although maybe a good chunk of this new wealth from BRIC countries knows no other life.
I personally believe the MEGA CLASS will demand security and privacy more than ever, although the trend to wealthy-display-discretion appears to be fading.
This MEGA CLASS of building will set new pricing records everywhere, and unfortunately if it is not separated from the commercial/coach/business/first-class-traveller-style real estate, it will distort pricing across the board. For those not eager for this extreme of lifestyle, the savings will be large. It will be important for all to recognize the vast difference in these buildings and understand that their value will be driven mostly by scarcity. Just like domestic first class, take a closer look at that pillow: if it’s not significantly better than the pillow in coach…..
Thursday, January 12th, 2012
Posted by Leonard Steinberg on January 12th, 2012
To-day revealed that a single Chinese buyer has gone to contract on FOUR apartments at One 57, the Extell developed tower rising on 57th Street between 6th and 7th Avenues with average pricing starting in the $ 5,000/sf range. Another Russian buyer was also identified. These BRIC buyers may make this building the BRIC TOWER of New York, the kind of building that attracts foreign buyers wanting a spectacular views apartment in an A-grade full services high security building.